Quarterly mortgage fraud activity dropped, according to the FraudBlogger Index. Some of the states with the most fraud activity were also the states with the most foreclosures.

From July 1, 2008, to Sept. 30, 2008, $1.1 billion in active criminal and civil cases of mortgage fraud were tracked by FraudBlogger.com. Activity fell from $1.7 billion in the second quarter and eased from $1.2 billion during the third-quarter 2007.

The total included fraud cases for which there was some activity tracked by FraudBlogger.com during the period.

The FraudBlogger Index, which reflects both the dollar volume of mortgage fraud as well of the number of active mortgage fraud cases, came in at 1220 for the third quarter. The index was 1230 in the second quarter and 727 a year earlier.

"The decrease in mortgage fraud tracked during the third quarter reflected a second-quarter surge resulting from stepped up efforts by the Federal Bureau of Investigation and the U.S. Department of Justice as part of Operation Malicious Mortgage," said MortgageDaily.com Publisher Sam Garcia.

The three worst states - Florida, California and Nevada - were also the three states with the most foreclosure filings during September, according to data reported by RealtyTrac.

The state with the biggest increase was Florida, which saw active mortgage fraud cases surge $86 million from the second quarter to the third quarter.

At 410, Arizona had the highest state index. Arizona's index stood at just 67 in the second quarter. RealtyTrac's September data indicated Arizona had the fourth-highest level of foreclosures.